Senate liberals voice opposition to Fed-based consumer agency

Two senators who voted against the confirmation of Federal Reserve Chairman Ben Bernanke said Tuesday they oppose a plan to create a consumer financial protection agency in the central bank.

Sens. Bernie Sanders (I-Vt.) and Byron Dorgan (D-N.D.), who is retiring, said that they will fight to remove the proposal from the forthcoming financial regulatory reform bill should it be included.

"It's a horrible idea. It's a terrible idea," Dorgan told The Hill. "I don't support it and I'll try to change it."

Sanders added that the creation of a Fed-based agency "will not preclude me from fighting [against] it through the amendment process or one way or another."

Senate Banking Committee Chairman Chris Dodd (D-Conn.) and committee member Bob Corker (R-Tenn.) are in talks about the plan amid criticism from some lawmakers that the Fed failed in its regulatory capacity during the financial crisis. The two negotiators are hoping to develop a plan that can gain widespread support in the Senate.

Republicans and some centrist Democrats in the Senate balked at an independent consumer agency, which would regulate credit cards and home loans. The standalone office is included in the House's bill and backed by President Barack Obama. 

But Sanders said that he opposes the Fed-based agency because he doesn't think it does a good job of protecting consumers and backed the independent office.

"Consumers need real, real, real protection. To do that you're going to need at the very least, a strong consumer agency dedicated just
to protecting them," he told reporters. "Some of us think that the Fed is not primarily there to represent the middle class and working families and the average consumers."

Senate Democratic Conference Vice Chairman Charles Schumer (D-N.Y.) on Tuesday cast doubt on Fed-based agency's ability to effectively regulate but did not rule out supporting it. 

Dodd's spokesperson on the Banking Committee, Kristin Brost, has not responded to a request for comment.

Senate Majority Whip Dick Durbin (D-Ill.), on the other hand, said that he is open to Dodd's proposals but stressed the need for a strong agency.

It's not yet clear how strong liberal opposition to plan will be.

Sen. Sheldon Whitehouse (D-R.I.), who voted against Bernanke's reconfirmation, also said that he is open to the plan.

"I'm more concerned about its authorities than its location," he told The Hill. "So I'll need to see more before making a decision, but that alone doesn't rule it out for me."

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